Leading Hong Kong Banks will raise interest rates and fees for credit cards from July

15.05.2012

This comes just a month after the rollout of the third stage of reforms to improve disclosure and other practices undertaken by the Hong Kong Monetary Authority in conjunction with the Hong Kong Association of Banks.

This stage of reforms involve nine measures and three of these will be implemented this year. The remainder will come into force next year. Smaller banks are also expected to revise rates and fees. Hong Kong and Shanghai Banking Corp said on Friday that interest rates on outstanding credit card balances and cash advances, effective from July, will be an annualized 34.46 percent and 35.61 percent, respectively, up more than 2.5 percentage points on each front.

Hang Seng Bank (0011) has raised rates and fees effective this month followed by Bank of China (Hong Kong) (2388) and China Construction Bank Asia in May. 

Expert’s opinion

“ To live within income  –  a guarantee and a base of life without crisis.

To live on credit  –  a road to hell, to chaos, to mess. The example of Greek idlers, living at the German eager beavers’ cost – the point-blank confirmation of it.

Generally, the increase of a creditor’s liability towards the bank for outstanding credits – a correct measure. It will lead to an increase of a liquidity of credit portfolio and to the decrease of pressure on the printing machine of securities. And, indirectly, it will clean the market from swindlers, using cheap credits, and those who loaned up in the other banks for the purpose of redemption of the old credit.
If the reforms take away also different derivatives, substitutes of money and securities from the market – we’ll consider the reform of the world financial system to be accomplished at last.

Although, I hardly believe in it…”

On the basis: http://www.gov.cn

Yaroslav Lomakin ( Managing Partner of Honest & Bright)